Playing the Guild Wars 2 economy means understanding supply and demand.

If you want to maintain a market presence for any one thing it is crucial that you understand it's supply and demand.  Ultimately your goal is to maximize your profits while maintaining enough stock to keep the demand there.  That means not putting too much out there and flooding it, but also never putting too little so that people either stop trying to buy what you are selling, or even worse, go to someone else.  The difficult part in all this is finding that luxurious middle ground.  Making this even harder is the fact that the middle ground is always changing.  The whole point of Guild Wars 2 Gold Guide is to teach you the finer points of the economics of Guild Wars 2.  I want to teach you guys how to succeed on the Guild Wars 2 Trading Post.  So as you can tell today we are going to break down supply and demand for you a bit so you can better understand it as it pertains to the game.

So how will you know when you are in the coveted middle ground?  First--you will know when things are selling.  This is a complete "Duh" answer, but there is more to it than just having your items sell.  If you are burning through your stock quickly that means one of two things.  Either you could be selling more of your item or you could be making more money on an item.

Example:
If you are selling ten Super axes (No..A Super axe is not a real Guild Wars 2 Item.)  You put two of them up for sale either on the trading post or through in-game chat.  You are selling them for 10 gold a piece.  You burn through the first four within ten minutes.  What you would do it sell a few more at a higher price.  Lets say you try to sell them for fifteen gold.  Ten minutes goes by and this time you've sold just two.  So at the markup you are making thirty gold every ten minutes, but when you had them at ten gold you were making fourty gold every ten minutes.  So now you know that the zone you want to work in is higher than ten gold, but lower than fifteen.  If you are selling at least four every ten minutes then you are just making more profit.  When you begin selling less than three every ten minutes then you would want to drop that price down to sell more.

You will never be able to just create a static price for an item and post it at that for weeks on end.  The prices, especially at the games release, are going to fluctuate drastically from hour to hour.  If you want to understand what is going on you need to track the prices of your item or commodity that you are wanting to sell.  This is a strategy that has been used in just about every MMO I have played.  I can't express enough how important it is to track your prices.

There is one other way to know if you are pricing your items correctly and that is a simple comparison between your items and the materials required to craft it.  Lets say that super axe from my example takes three pieces of iron and a piece of wood.  Each piece of iron sells for two gold, fifty silver. A piece of wood sells for one gold.  Your total investment is eight gold, fifty silver at this point and you are selling them for ten gold.  This means you are taking a one gold, fifty silver profit off of each item that you sell and thus you are priced correctly.  If you are in competition with someone else you also now know how low you can go with your price and still stay profitable.

It is so important to understand supply and demand if you are going to be in the business of making gold.  It is the difference between making insane profits and losing insane amounts of gold as well as losing your market to someone else who does understand it.  If you are interested in learning more important tips for making gold you can subscribe to the mailing list!